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Coca Cola Company Refuses Franchise for Sale of Drink in Israel

The Coca Cola Company today confirmed that it has refused to sell Coca Cola in Israel but contended that its decision was not motivated by Arab boycott threats. An official spokesman for the company told the Jewish Telegraphic Agency that denial of a franchise was based on a “business judgment” that sale of Coca Cola in Israel would not be profitable.

The tremendous volume of Coca Cola sales in Egypt, Lebanon, and a number of other Arab states were reported by informed sources, however, to have influenced the company’s decision. Threats from Beirut and Cairo were cited, if the American company provided Israelis with “the pause that refreshes.”

The Coca Cola spokesman said that in December, 1964, Tempo Soft Drinks Co., Ltd., of Israel, applied for franchise to bottle Coca Cola in Israel. “In January, 1965 we advised the applicant that as a result of careful study of his presentation it remained our considered business judgment that economic and market conditions in Israel were not yet such as would permit establishment and development of a Coca Cola bottling operation in that country on a mutually profitable basis,” said the spokesman. “We also advised the applicant that we took the same position in respect to prospects in a number of other countries in various parts of the world, some of which were also in the Middle East, for example: Jordan and Syria,” the spokesman added.

In September, 1965, the company reaffirmed the decision taken in January of that year. The Company maintained that “in addition to the applications from Tempo, we have received applications from a number of other individuals of ample means and good prospects. These other applications will also have to be given consideration when economic conditions justify it.

Coca Cola made known that “on several occasions we have acquainted Mr. Arnold Forster, general consul of the Anti-Defamation League of B’nai B’rith, with our position which we assured him was based upon local economic and market conditions rather than political considerations.” U.S. Commerce Department sources said anti-boycott provisions of the Export Control Act “lacked teeth” for Federal Government intervention at this juncture in view of the Coca Cola Company’s assertions.

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